AWS Instance Purchasing Options

Reserved Instances (RI)

Overview

• Advance purchase of EC2 instance usage

• Significant discount compared to On-Demand

• Automatic discount application

• Available for EC2 and RDS

• Shareable across accounts with consolidated billing

• Can be sold on Reserved Instance Marketplace

Types of Reserved Instances

Standard Reserved Instances

• 40-60% discount

• Terms: 1 or 3 years

• Payment options:

  • All upfront

  • Partial upfront

  • No upfront

• Limited flexibility

• Can be sold on RI Marketplace

Convertible Reserved Instances

• 31-54% discount

• Same term options as Standard

• Greater flexibility

• Can change instance family

• Can benefit from price reductions

• Currently not sellable on RI Marketplace

Reserved Instance Attributes

1. Instance Type Configuration

   • Instance type (CPU, memory, networking)

   • Platform (OS)

   • Tenancy (shared/dedicated)

   • Optional AZ specification

2. Zonal vs Regional RIs

   • Zonal: Specific AZ with capacity guarantee

   • Regional: Any AZ in region, no capacity guarantee

   • Changeable via console/API

   • Instance size flexibility (Linux/default tenancy only)

Spot Instances

Fundamentals

• Uses AWS excess capacity

• Market-based pricing

• Significant cost savings

• Risk of termination

Spot Request Types

1. One-Time (Fill and Kill)

   • Single fulfillment

   • Terminates when price exceeds bid

2. Maintain

   • Automatically reprovisions

   • Continues after termination

   • Price-dependent provisioning

3. Duration-Based

   • Fixed time period

   • Automatic termination

   • Specified duration

Market Behavior

• Price fluctuations by AZ

• Instance type impact

• Demand-based pricing

• Strategy considerations for different AZs

Dedicated Options

Dedicated Instances

• Hardware dedicated to single account

• Available as:

  • On-Demand

  • Reserved

  • Spot

• Additional $2/hour per region cost

• Shares hardware with account's non-dedicated instances

Dedicated Hosts

• Physical server dedication

• Instance placement control

• Licensing advantages

• Single instance type per host

• Available as:

  • On-Demand

  • Reserved

• Capacity varies by instance type

Best Practices

Cost Optimization

• Mix purchase options for optimal cost

• Consider workload patterns

• Monitor market prices

• Use automatic scaling with spot instances

Availability Strategy

• Use multiple AZs for spot workloads

• Consider capacity guarantees for critical workloads

• Plan for instance interruption

• Implement proper backup strategies

License Management

• Use dedicated hosts for license-bound software

• Track core/socket requirements

• Plan capacity based on license restrictions